However, a tentative two-week ceasefire agreement was reached in the last hours before U.S. President Donald Trump had threatened to destroy the Iranian civilization if the Strait of Hormuz was not reopened. Crude oil tumbled in response, and agricultural commodities — including canola — were also lower on April 8.

Crude and canola

After trading in a C$20 range from C$720 to C$740 per tonne for most of the previous month, the May contract fell below C$710 per tonne after the ceasefire announcement. That took the contract to within a few dollars of where it had been prior to the U.S./Israeli attacks on Iran that started Feb. 28. From a chart standpoint, the highs in canola appear to be in for the time being. There’s plenty of room to the downside if the speculators holding large net long positions decide to start liquidating.

The likelihood of more twists and turns in the Middle East should keep all markets on edge through the tentative ceasefire, but North American grains and oilseeds will also be taking more direction from their own fundamentals as the next growing season gets underway.

Ceasefire impacts

Iran will allow vessels through the Strait of Hormuz under the ceasefire agreement, albeit at a cost. Vessels stuck in the Persian Gulf should be able leave, but it’s uncertain how many ships will brave the journey back into the war-torn area given the small ceasefire window.

Physical shortages are already being seen in parts of the world, with an estimated 30 per cent of the world’s fertilizer trade moving through the strait.

Prices tend have an easier time going up than down, so fertilizer costs that climbed higher during the closure of the key waterway are unlikely to soften enough to provide much relief at seeding time. Planting decisions could see some adjustments, but one question now is how yields may be hurt by reduced fertilizer applications.

Seasonal price trends generally see canola move higher in the spring. Whether those seasonal trends are enough to counter the larger geopolitical developments remains to be seen.

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On April 1, profit-taking took May canola down C$13.30/tonne to close at C$718.50. However, it has still remained between C$710 to C$740 since March 24.

Phil Speiss from RBC Dominion Securities in Winnipeg said while canola prices have been in a bullish trend line over the past few months, fundamentals are leaning bearish due to large stocks and high acreage expectations this year.

• For daily market updates, visit the Western Producer Markets Desk

A canola contract closing below its 20-day average in two straight sessions is an indicator of a downturn, he added.

“That’s step one. Get a close below the trend line,” Speiss said. “If you can get (two closes below), well now you start talking maybe there’s a potential downside. You look at targets from previous days. On (March 23), we saw a low of C$708.70/tonne and (the week) before that, we saw C$700.60. Those would become targets on the downside.”

Canola prices are largely tied to crude oil and especially to Chicago soyoil, but Speiss said diesel and heating oil markets are also influencing the oilseed.

“(Heating oil) is the most firm out of the energy markets,” he said. “There is a connection there on the bio side of things … If you look at a heating oil chart, it’s going straight up. If you’re playing biofuel and you’re a speculator or large managed money and you see that play, you’re just feeding into that canola length.”

Canola crush margins are also remarkably strong with the May contract at C$333.64/tonne as of March 31, more than double from a year earlier (C$165.31). However, Speiss noted that margins are sure to come down soon.

“It’s parabolic,” he said. “We know the crush pace is the crush pace. We know that they’re full through summer. At some point, it’s just a number. From a futures perspective, we see crush demand getting pushed further and further out the curve: November, January 2027, March 2027 … (Crush margins) don’t play too much of a role anymore.”

As for where canola prices could go in the near future, Speiss said they’re as uncertain as the war itself.

“We’re so tied to the geopoliticals right now, it’s an impossibility,” he said. “If you want to bet on anything, the trend just stays intact until you break it.”

The post ICE Weekly: Trade waits for canola to break out appeared first on Manitoba Co-operator.

The future, though, is a little scary.

“There’s definitely a lot of noise out there right now,” said Darren Bond, a farm management specialist with Manitoba Agriculture.

Both fertilizer and fuel prices have shot up since missiles fired by the U.S. and Israel started falling in Iran. Sea traffic through the Strait of Hormuz — through which 20 per cent of global oil and gas travels — has been choked in response to the conflict, while a number of key oil and gas facilities in the Gulf have been hit by military strikes, also shuttering fertilizer facilities. Farm Credit Canada says the Middle East accounts for about 12 per cent of nitrogen production, and almost a quarter of the world’s global trade.

On March 19, Reuters reported that benchmark Brent crude oil prices ended the day at US$109 a barrel, and quoted Goldman Sachs estimates, which warned that the price could smash its 2008 record of $147.50 if tensions didn’t ease.

Markets have tightened further with news that Russian fertilizer exports are bumping up against a ceiling and China will be pulling back its exports, in an effort to protect its domestic supply as global supplies are squeezed.

U.S. urea futures jumped by roughly US$130 per tonne, or nearly 30 per cent, within two days of the conflict in Iran ramping up Feb. 28, according to a Farm Credit Canada (FCC) web post March 9.

Why spring fertilizer timing got complicated

Back in January, during Manitoba Ag Days in Brandon, farmers were already warned not to wait on fertilizer purchases. Parrish & Heimbecker’s head of market analysis, Tyler Freeman, told farmers that the usual price downswing hadn’t happened in summer 2025.

That was before the conflict in Iran intensified at the end of February.

The suddenly tighter margins and sky-high volatility risk have sharpened focus on cost-of-production as farmers gear up for a higher-risk production year.

“We need to … put that uncertainty as much as we can to the side and think with cold, hard numbers,” Bond said. “Once we start doing that, we start coming up with our plan. A lot of times our stress will dissipate.”

Planning remains the best defence

Cost-of-production budgets should be treated as working documents, updated continuously as projected costs turn into actual figures throughout the season, according to Bond.

“It’s not something that just gets touched once and then pushed to the side of the desk,” he said.

Using real numbers helps producers identify potential profitability challenges early, giving them more time to adjust. That approach also helps reduce the risk of making decisions based on fear rather than data.

“The earlier on in the season that we can identify that we might have a profitability issue, the more time that we’ll have to either make changes or make provisions,” Bond said.

Who’s exposed and when it hits

Farmers that already have their fuel and fertilizer in hand will be spared the first wave of the spiked markets.

Depending on how long war-driven trade disruptions stretch though, that financial wall may still be waiting the next time they need to buy inputs.

“This looks to be more of an issue for those who haven’t priced fertilizer yet … and going into a next year issue, or even, like, this fall,” Bond said.

Fertilizer availability typically varies across the country this time of year.

A 2022 RealAgristudies survey, later cited by FCC, found that more than half of Prairie farms have usually secured their spring fertilizer by late-March.

In contrast, only 17 per cent of Quebec producers and 10 per cent in Ontario had done the same, while none of the surveyed Atlantic Canadian farms reported having fertilizer on hand.

Statistics Canada data shows a similar divide today, with urea inventories in Western Canada at their highest levels in a decade, while Eastern Canada sits at its lowest since 2017.

Fertilizer movement typically peaks in April and May. Any disruption to shipping or supply chains during that window could still create localized shortages or price spikes.

Timing purchases have been complicated by the global uncertainty, Bond noted.

“As we’ve seen with the world events and world news, things change pretty quick,” he said.

If things do ease in the Middle East, relaxing pressure on global fertilizer supply, that could just as quickly improve the situation for farmers who still have to lock in fertilizer. Or things could get worse.

Depending on how many farmers waited to buy their spring fertilizer, that could add further pressure on supply.

Fertilizer shipments leaving the Middle East now, may not reach North America until May, potentially forcing adjustments in application timing or rates.

Cost pressures raising the stakes

The current headlines are attention-grabbing, but Bond said there’s been less dramatically visible issue swelling in the background.

Production costs in general have risen steadily over the past several years. At St. Jean Farm Days earlier this year, Bond said farmers are facing much higher inflation costs than the already high rates experienced by the average Canadian in the last five years.

According to Bond, general inflation in the broader economy rose about 20 per cent between 2020 and 2025, but “the numbers that we see … shows that farm level inflation in that five-year period is more around that 50 per cent.”

That shift has fundamentally changed the risk profile for producers. Five years ago, a farm might have spent roughly $500 per acre to generate $50 per acre in profit. Today, that same return may require $700 to $750 per acre in costs.

“It takes more money to generate the same returns,” Bond said. “So that creates more risk.”

Fertilizer is one of the most significant input costs on Manitoba farms, and Bond stressed that any increase in price or misstep in application can quickly erode already thin margins

And unlike the market conditions seen in 2022, when high commodity prices helped offset rising input costs, current forecasts suggest farmers may have less cushion this year.

FCC estimates that a 40 per cent increase in nitrogen prices could cut average Saskatchewan margins for a wheat-canola rotation roughly in half, from about $50 per acre to $25 per acre.

The post Fertilizer prices are spiking — here’s what Manitoba farmers need to know before seeding appeared first on Manitoba Co-operator.

The May canola contract closed at a high of C$739.90 per tonne on March 13 and then pulled back to C$702.60 on March 16. It recouped most of its losses the following day, but slipped to C$726.20 on March 18.

Tryhuk said canola prices are “weakly correlated” with those of crude oil, they follow soyoil prices more strongly. The May soyoil contract in Chicago reached 67.44 cents per pound on March 13, but dropped limit down on March 16. Soyoil regained most of its decline the next day, but eased back to 65.53 cents/lb. on March 18.

For daily market updates, visit the Western Producer Markets Desk

“(Soyoil) was really more influenced by Trump’s and China’s decision to push back on some of their anticipated meetings because of what’s happening in the Middle East,” he said. “Perhaps that selloff was a bit oversold. The meetings weren’t cancelled, just postponed.”

In addition to higher prices, Tryhuk thinks canola planting in 2026-27 is likely to exceed the 22-million-acre mark.

Statistics Canada projected 21.84 million acres of canola to be seeded this spring. However, data collection was completed before China’s reduced tariffs on Canadian canola exports and before the war started in the Middle East.

“If anybody had the potential for swing acres and they weren’t sure what to do, then without a doubt,” he said. “We were looking at prices in the lower end of the C$600 range leading up to the report collection and since then, (canola) swelled by over C$100. I’m sure this will inspire (more) acres and perhaps the seeded figure will come closer to what the trade estimated.”

Export demand underwhelming

Nevertheless, rising canola prices could also backfire. Export demand has not been as much as anticipated after China reduced its tariffs.

“Higher prices will put some demand out of reach … A lot of the activity we’re seeing is crusher demand but I don’t think we’re seeing a lot of export demand,” Tryhuk said. “The domestic crush industry is going to have to support the futures. As long as the crush margins remain as excellent as they are, we’re not going to be concerned about a collapse or erosion in values.”

He added that canola could see more demand outside Canada, depending on the United States 2026 and 2027 biofuel blends to be announced later this month. Meanwhile, the canola crush was 11.5 million tonnes last year and is on pace to match that this year. This could mean Canada’s canola crush capacity may have reached its upper limit.

As crude oil prices stay elevated, canola is likely to do so as well.

“I think it’s fair to say we’ve probably reached a new price band for canola and I wouldn’t expect us to return to the C$625 area this year,” Tryhuk said. “Yes, we’ll see a pullback in crude. Yes, we’ll see a similar pullback in canola … But the media is saying there won’t be a quick resolution to this conflict and as such canola should be supportive generally.”

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Chuck Penner, founder of LeftField Commodity Research, spoke at the 2026 Canadian Crops Convention about supply and demand in the Canadian grains sector and how a strong 2025 could lead to a complex 2026.

WHY IT MATTERS: Canadian farmers will soon be planting the 2026 crops, with large old crop supplies complicating the market outlook.

“We talk in ag markets always about cycles,” said Penner. “The market is cycling. And so right now, we’re in a supply-heavy situation. But is that going to continue? I would argue ‘no.’”

“What we have is this comfortable carryover,” he continued noting that can lead to a complacent mindset in grain markets.

Canada produced an aggregated 106 million tonnes of grains, oilseeds, pulses and other crops in 2025, 10 million more than the previous year.

“So, what are we doing with that grain?” Penner asked.

Farmer deliveries are already up three million tonnes over last year. Exports are at 25 million tonnes, up from the five-year average by around 2.5 million.

“That’s good, but it still doesn’t dispose of 10 million tonnes more production,” Penner said. “If we keep this pace up, and there are some really good signs that we will keep this pace up, then we will work that down to some degree.”

Despite what Penner referred to as a “heavy-supply mindset” hanging over the sector, prices are still moving, and he expects them to continue firming up.

Many crops see seasonal price peaks in the spring, but Penner cautioned that those commodities will start to tip over in early summer “and everybody’s going to freak out and talk about the heavy supplies again.”

One problem now is there is not much urgency in attracting acreage.

In tighter supply years, such as after the 2021 drought, buyers were desperate and some started contracting for 2022 new crop in October and November already. However, this year, the sentiment is “we’ll buy it when we need it,” said Penner.

Resolving heavy supply

For some major crops like barley, canola and soybeans, stocks-to-use ratios are wide, but Penner said those ratios will likely be a bit lower at the end of 2026-27.

“There’s a key reason for that,” he said. “What happens when we drop back to either average or to trend yields? It basically wipes out. It’s a far bigger influence on the supply situation for next year than acreage shifts.”

While acreage shifts are interesting, a return to average yields in Western Canada after the bumper crops of 2025-26 would “do a whole lot in terms of resolving the heavy supply situation that we have,” said Penner.

“If we move to an average yield or even a trend yield in those major crops, the supply numbers get close to the five-year average,” he said adding that supplies of oats, corn and soybeans may even become tight.

What to plant this year?

Penner said his recommendation for 2026 was to plant oats.

“If you all rush out and plant oats now, of course that effect is gone. But barley and durum supplies should remain comfortable. It’s the pulses and special crops that are going to take a couple of years to really resolve the heavy supply situation.”

Currently, he said global supplies will favour the buyer.

“2025-26 was a good year globally. No question,” he said. “The question is, can it repeat?”

Penner offered general market thoughts on crops for 2026.

Wheat

Wheat saw record global and Canadian production with prices remaining relatively flat. Penner pointed out wheat is almost never touched by trade disruptions or tariffs. Canada is also exporting durum almost at last year’s record pace, even with strong European and North African crops.

Barley

Barley had a record yield last year with the largest Canadian crop since 2020-21, and prices are rising. Penner said Canada has strong barley exports to countries like China, Japan and Saudi Arabia.

Oats

Penner said the main concern with oats is a weaker export pace. Other export markets like Australia and the U.S., which saw its biggest oat crop in over 10 years, could challenge Canada. He said he thought soft prices could discourage acreage in 2026 and leave Canada with “some really tight supplies of oats.”

Canola

Canola production and yields were strong globally, leading to increased supplies, but according to Penner, “the demand side is the bigger picture.” With the market more certain following U.S. biofuels and potential tariffs, prices have continued to rise. He added if canola drops back to average levels, supplies will tighten and demand will strengthen.

Peas

Peas also had near-record yields in Canada which, combined with a strong Russian crop, have led to a global glut. Though imports from India are not what they have been, Penner said other buyers like China have also stepped in. He said there is a sizable carryover into 2026, especially for green peas.

Lentils

Penner said demand is fairly static for green lentils but could be stronger for red lentils. On both fronts, he said it must get stronger to deal with supply, but it is “hard to see that happening.” He added there is a huge supply of green lentils now hanging over the market, but “the red picture will be more balanced.”

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Terry Reilly, an independent analyst, said soyoil on the Chicago Board of Trade is the commodity most closely following the lead of crude oil, with the latter almost touching US$120 per barrel earlier this week. The May soyoil contract closed at 67.16 U.S. cents per pound on March 11, up 3.57 cents or 5.6 per cent from the week before.

While corn, soybean and wheat prices won’t be as closely tied to crude oil as soyoil, Reilly said their movement will still be determined elsewhere.

“The outside markets will continue to drive the markets for at least until when the conflict starts to wind down,” he added. “Fertilizer is going to be heavily impacted and it will drive up the costs for farmers across the globe. It’s shifting some ideas and we could see less acres go into the ground this spring across North America.”

There was also speculation the United States Environmental Protection Agency may submit its 2026 renewal fuel standard later this week, which could increase the need for corn (ethanol) and soybeans (biodiesel). However, Reilly doesn’t anticipate any increased demand.

“Currently, the prices of some of the feed stocks like canola oil going to California or (used cooking oil) and tallow, their prices are at a discount to soybean oil,” he explained. “I don’t see any greater demand for alternative fuel sources, but no doubt we’ll probably be blending as much ethanol as we can.”

Reilly added he was surprised to see the U.S. Department of Agriculture trim projected soyoil use for biofuel by 800 million pounds at 14 billion in its monthly supply/demand estimates released on March 10. But there were little changes to projected U.S. corn, soybean and wheat stocks. While Reilly thought corn and soybean exports were “on the low side”, he believes the trade is more focused on new crop plantings.

“We still have several months to go until the end of the regular crop year,” Reilly said. “But either way, U.S. soybean stocks are expected to be pretty tight at the end of the season as China continues to buy U.S. beans.”

The war in Iran will continue to leave the trade guessing and keep prices higher, Reilly stated, adding that some analysts believe crude oil could surpass US$150/barrel. However, prices should stabilize once the war ends.

“I think after things start to cool down a little bit, I’d look for prices to get lower,” he said.

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“China stepped up and bought a lot of Canadian origin barley, which put the price up C$40 (per tonne) off the low for new crop,” Peterson said.

He reported feed barley bids at C$290/tonne delivered in Lethbridge for old crop and C$270 to C$275 for new crop. Feed wheat was trading at C$280 to C$285/tonne delivered.

Peterson said feedlots in southern Alberta are well-covered for grain.

“You have southern Alberta in relatively good shape right now for coverage. So you have two markets trading,” he added. “We’re poised to trade higher once we see some demand come back to the market in southern Alberta.”

Purchases of corn imported from the United States have quieted down as of late, said Peterson. But if there is continued demand for feed grains in the Canadian export market, he expects more corn to enter the markets due to its price parity with feed barley.

“If barley trends higher, you’re going to see feeders in the spring and summer switch to adding corn in their rations to limit the upside on barley,” Peterson explained.

As spring approaches, so does a potential weather market. Because of this, Peterson believes prices won’t be steady in the coming weeks.

“If we start getting some decent moisture, you’ll probably see some more grain liquidate off the farm,” he said. “Right now, we’re poised to continue to move higher or stay where we’re at. But we’re looking to go lower over the next three months.”

Prairie Ag Hotwire reported on Feb. 27 that delivered feed barley prices in Saskatchewan ranged from C$4.90 to C$5 per bushel, steady from the week before. The range in Alberta was from C$4.79 to C$6.05/bu., up seven cents from the past week. In Manitoba, it was C$4.60 to C$4.61/bu., down one cent.

For feed wheat, the price in Saskatchewan was C$7.00/bu., unchanged from the previous week. That in Manitoba was C$6.04/bu., up 10 cents. Values ranged from C$5.97 to C$7.76/bu. in Alberta, up five cents.

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It didn’t take long to see the reaction. Rather than accept the court’s limits on his authority, President Trump pivoted immediately, criticizing the ruling and announcing new tariffs under a different statute, with hints that rates could rise further — a response entirely consistent with his brand.

Some pundits rushed to claim the decision was a humiliation. That is nonsense. If anything, the ruling handed President Trump an opportunity to inject even more uncertainty into global markets. A Supreme Court endorsement of the original tariffs would have created a predictable — if unpleasant — framework. Predictability allows businesses to adjust. What we now face instead is fluidity. And fluidity, in trade policy, is far more destabilizing.

Canada conducts roughly $100 billion a year in agri-food trade with the United States, with close to two-thirds of our food exports heading south. This is not simple trade — it is integration.

Cattle and hogs cross the border for feeding and processing. Canola is crushed in Canada and enters the U.S. as oil and meal. Processed foods depend on American ingredients, machinery and distribution networks. Hundreds of millions of dollars in food products move across the border every single day. When Washington experiments with tariff authority, that uncertainty moves directly from farm gate to grocery shelf.

Even before the Supreme Court’s ruling, many Canadian food businesses exporting non-CUSMA compliant products were forced to reduce their prices simply to remain competitive in the U.S. market. American buyers facing tariff costs could easily switch to domestic alternatives. To preserve contracts and shelf space, Canadian exporters absorbed part of the tariff burden themselves.

That meant thinner margins, delayed investments, and in some cases postponed expansion plans. Tariffs do not just tax goods — they compress profitability.

Risk remains

Even if CUSMA-compliant goods remain exempt for now, trade risk has not disappeared. A product can be technically tariff-free and still face higher input costs, stricter border scrutiny, currency volatility and contract renegotiations.

In a deeply integrated $100-billion food corridor, uncertainty alone raises wholesale costs — and wholesale costs eventually reach consumers. Food prices in Canada can move without a single tariff being formally applied.

Looking ahead to the CUSMA review, the environment has rarely looked more delicate. President Trump could threaten to dismantle the trilateral framework and pursue bilateral deals with Canada and Mexico separately. The threat itself would be a powerful negotiating tactic.

In practice, fully tearing up CUSMA would be economically disruptive and politically complex, especially given the degree of North American integration in agri-food. More likely, bilateralization would serve as leverage rather than destination. But with this week’s rapid pivot, complacency would be naïve.

In Ottawa, restraint will matter. Escalating with new counter-tariffs to “punish” the Americans would only ricochet back onto Canadian grocery bills, as we have already seen. In the current environment, discipline — not bravado — will determine whether Canadian consumers ultimately pay the price.

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At the 2026 Milano Cortina Winter Olympics, that sport was ski mountaineering. Rather than just timing how fast an athlete goes down the mountain, in ski mountaineering the participants must also first climb to the top of the hill. There was a slippery staircase involved, the fumbling of taking skis off and on, and some kind of special ski grippers that athletes would stuff into their clothes when not in use. The entire thing was ridiculous to a casual viewer, but compelling just the same.

After months of sideways and directionless trade, wheat futures finally took a run at climbing higher in mid-February — at roughly the same time as the Olympic ski mountaineers were competing. Wheat prices hit their strongest levels in seven months. Is there more room to the upside, or is it already time for the inevitable return to the starting line?

Charts

The May Chicago soft wheat contract settled at US$5.8025 on Feb. 20, its highest settlement since July 2025. The contract has tacked on about 60 cents per bushel since the start of the calendar year, surpassing all its major moving averages. The advances in spring wheat were more subdued, but the May contract hit its highest levels since September 2025.

May spring wheat ran into resistance at US$6 per bushel and remained short of its next resistance around US$6.14 per bushel. For Chicago soft wheat, the six-dollar mark could be the next upside target with nearby support around US$5.60 per bushel.

U.S. crop

The United States Department of Agriculture held its annual Agricultural Outlook Forum Feb. 19 to 20, with the agency predicting total wheat area in the country for the 2026/27 marketing year at 45.0 million acres. That would only be down by 300,000 acres from the year ago. Average yields were forecast at 50.8 bushels per acre, down from the record 53.3 bu./ac. seen in 2025-26.

The USDA wheat projection assumes only a minor reduction in spring wheat and durum area, of less than 50,000 acres, but the agency is also predicting soybean area will be up by 4.8 million acres. While much of that increased soybean area is expected to come at the expense of corn seedings, spring wheat area in the Northern Plains may also end up planted to soybeans instead.

The recent strength in wheat futures is partially tied to ideas that the U.S. crop won’t be as large as the official projections.

Winterkill

Cold temperatures in Europe and the Black Sea region, along with ongoing dryness issues in parts of the U.S. Plains, have contributed to the gains in wheat with analysts from both sides of the Atlantic lowering their production estimates. Farmers in southern Ukraine also typically start planting their spring crops by late February, but the ground was still frozen this year.

The lack of progress on peace talks between Russia and Ukraine remains another factor in the background of the wheat trade, along with the mounting tensions between the U.S. and Iran.

Canada

Statistics Canada will release its first planted area estimates for the 2026-27 crop on March 5. The survey was conducted before the agreement lowering Chinese tariffs on Canadian canola was announced. While Canadian wheat bids have also shown some strength in sympathy with the U.S. futures, the gains in the canola market following the China news are much more substantial and actual seeded area will likely see more canola and less wheat than whatever StatCan reports.

Funds

The speculative fund position can be an indicator of broader market sentiment. The funds were buying back some of their bearish bets as the futures rose in early February. However, they remain net short nearly 100,000 contracts across the three U.S. wheat markets as of mid February.

More weather or geopolitical issues could be the spark to encourage additional short covering, taking wheat higher up the mountain. However, world wheat supplies remain burdensome, with large harvests in Australia and Argentina now coming on the market, with the inevitable decline always faster than the climb up.

The post Expert’s Radar: Ups and downs in wheat futures appeared first on Manitoba Co-operator.

The May canola contract closed above $690 per tonne and July canola surpassed $700/tonne on Feb. 24, the first time for both contracts in six months. Canola prices have risen $80 since the start of 2026, pacing ahead of their respective 20-, 50- and 100-day moving averages.

Canola’s value has risen despite the record crop estimated by Statistics Canada for 2025-26. But while China’s reduction of tariffs on the Canadian oilseed announced last month supported prices, it’s Chicago soyoil’s rally that’s driving canola’s own upswing.

The May soyoil contract has gained nearly 12 U.S. cents per pound or 25 per cent of its value since December, closing at 60.50 cents on Feb. 24. Just like canola, soyoil has exceeded its moving averages since January.

Soyoil’s rise has been driven by optimism over increased demand from the biofuel sector. At the United States Department of Agriculture’s Outlook Forum on Feb. 19, soyoil use in biofuel production was projected to reach 17.3 billion pounds in 2026-27, which would be 47 per cent above the 11.758 billion used in 2024-25. There are expected to be 85 million acres of soybeans to be planted in the U.S. this year, up from 81.2 million in 2025. The USDA also projected soyoil exports to plummet from 2.492 million pounds in 2024-25 to 1.2 million in 2025-26 and 600,000 in 2026-27.

If next year’s figures were to be realized, they would wholly depend on the Trump administration’s biofuel mandate for 2026, which is expected to be announced in the coming weeks.

Even then, canola’s and soyoil’s prices aren’t expected to hold for long.

In addition to both facing resistance levels, the relative strength indexes for canola and soybeans exceeded 70 as of Feb. 24, indicating overbought contracts. Brazil’s record crop will soon flood the global market and add to the soybean crush, despite a slower than average start to the harvest.

While current canola prices are well-deserved for growers left reeling from China’s months-long de facto ban on the oilseed, they will be a brief respite from the price pressures soon to come.

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